From ‘uninsured’ to ‘underinsured’

For working people making modest wages and struggling with high medical bills from chronic disease, President Barack Obama’s health care plan sounds like long-awaited relief. But the promise could go unfulfilled.

It’s true that patients with cancer and difficult conditions such as multiple sclerosis or Crohn’s disease will be able to get insurance and financial help with monthly premiums.

But their annual out-of-pocket costs could still be so high they’ll have trouble staying out of debt.

You couldn’t call them uninsured any longer. You might say they’re “underinsured.”

These gaps “need to be addressed in order to fulfill the intention of the Affordable Care Act,” said Brian Rosen, a senior vice president of the Leukemia & Lymphoma Society. “There are certainly challenges for cancer patients.”

“Cost may still be an issue for those in need of the most care,” said Steven Weiss, spokesman for the American Cancer Society Cancer Action Network. That “makes it critically important for patients looking at premiums to also consider out-of-pocket costs when choosing a plan.”

Out-of-pocket costs include a health plan’s annual deductible, which is the amount before insurance starts paying, as well as any copayments and cost-sharing.

A few numbers tell the story. Take someone under 65 with no access to health insurance on the job and making $24,000 a year — about what many service jobs pay.

Under the health care law, that person’s premiums would be capped below 7 percent of his income, about $130 a month. A stretch on a tight budget, yet doable.

But if he gets really sick or has an accident, his out-of-pocket expenses could go as high as $5,200 a year in a worst-case scenario. That’s even with additional financial subsidies that the law provides people with modest incomes and high out-of-pocket costs.

The $5,200 would be more than 20 percent of the person’s income, well above a common threshold for being underinsured.

“Chronically ill people are likely to be underinsured and face extremely high out-of-pocket costs,” said Caroline Pearson, who tracks the health care overhaul for Avalere Health, a market research and consulting firm. “While the subsidies help, there still may be access problems for some populations.”

Under the law, insurance companies competing in new online markets like HealthCare.gov can offer four levels of coverage.

Bronze plans have the lowest premiums but provide less insurance. Gold plans are the closest to employer-provided coverage. Indeed, members of Congress and staffers who will now get their coverage through the health care law have been steered to gold plans.

Silver, however, is the standard for most consumers. The law’s tax credits to help with premiums are keyed to a benchmark silver plan in each geographical area. And the law’s subsidies to help with out-of-pocket costs are only available to people who get a silver plan.

Avalere found that the average annual deductible for silver plans is $2,567, more than twice what workers in employer plans currently face. Additionally, many silver plans have high cost-sharing requirements for prescriptions, particularly “specialty drugs” to treat intractable conditions such as severe forms of arthritis.

Some plans may offer limited relief by covering certain services before a patient has met their annual deductible. Those services can include primary care, some prescription drugs and routine care for common chronic conditions such as high blood pressure and diabetes.

But Pearson says that won’t help people with high-cost illnesses. “Chronically ill people may still experience significant financial challenges,” she said.

Platinum or gold coverage may be the better option for people with serious health problems. They’ll pay more in premiums, but reduce exposure to out-of-pocket costs.

Obama administration spokeswoman Joanne Peters said the new system is still “night and day” from what patients faced for years, because insurers can no longer turn away those with pre-existing medical conditions, and because the new plans cap out-of-pocket costs. While that limits medical debt, it doesn’t eliminate it.

One of the leading advocates of the health care law says most people will still come out ahead.

“If the question is, will some people find that coverage and care remain unaffordable, the answer is yes,” said Ron Pollack, executive director of Families USA. “There will be some people who feel that way. The overwhelming majority will be far better off, even if what they have is not perfect.”
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You get what you pay for: If you pick the cheapest exchange plan, you are assuming you won’t need anything but the basic preventive services that are free. But you still get to pay the insurance company’s much cheaper negotiated prices on anything that does come up before reaching your high deductible, (which can save you a TON over the hospital’s insane “charge register” prices), and you still have a maximum out-of-pocket cap at $6300 per person per year. It could sting if you guessed wrong by picking the cheap plan, but then again it could also sting if you opted for a more expensive plan and then never used it!

Insurance is meant to cover unlikely-but-possible risks, and the cheap exchange plans are exactly the kind of catastrophic-coverage the experts say healthy young people should have. These cheap plans are a terrific deal for healthy young non-smokers earning just above the Medicare income limit: With the tax credit, they get the coverage almost for free. For example, in California, it’s $42/month. (MUCH cheaper than the health insurance many colleges and universities have required for their students.)

This is what we have to do now to find a negative story about Obamacare?

Wow, this sure is a long way from the trainwreck stories of 2 weeks ago. I guess all the “Meltdown in the first week” headlines all the papers had ready had to be thrown in the trash. Now its “they could be stuck with a $6000 bill.” Compared to uninsured and sued into bankruptcy, looks like the ACA is doing a good job.